Bloomberg Businessweek - USA (2019-09-30)

68

ILLUSTRATION

BY

GEORGE

WYLESOL.

DATA:

BUREAU

OF

ECONOMIC

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Theeconomyhasbeenperhapsthebrightestspotof

DonaldTrump’sunconventionalpresidency.Areces-

sionwouldtarnishthis,whichis presumablywhyhegets

soworkedupaboutperceivedmisstepsbytheFederal

Reserve.Butbyonemeasure,economicgrowthis already

slowerduringtheTrumperathanduringBarackObama’s

eightyearsaspresident.

Thatmeasureisgrossdomesticincome.GDIispart

ofthesamequarterlynationaleconomicaccountingby

theU.S.DepartmentofCommerce’sBureauofEconomic

Analysisthatgivesusgrossdomesticproductbutis

releaseda monthlater.Thetwonumbersshould,inthe-

ory, beidentical,buttheyneverquitearebecauseofthe

vagariesofreal-worlddata.Ina 2010paper,economist

JeremyNalewaik—thenattheFed,nowatMorganStanley—

madethecasethat“GDIbetterreflectsthebusinesscycle

fluctuationsintrueoutputgrowth.”

Thepaperhadsomeconsequences.TheBEAstarted

givingGDIsomeattentioninitsGDPnewsreleasesand

publishingtheaverageofGDPandGDI.Also,theFederal

ReserveBankofPhiladelphianowcalculatesa statis-

ticallysmoothedmeldingofGDPandGDI,devisedin

part byNalewaik,thatit callsGDPplus.Thepresidential

growthratesadmittedlydependa lotonthestartingquar-

teronechooses,especiallyforObama,whotookoffice

amidtheworstrecessionin 75 years.Also,whilegrowth

rates havebeenaboutthesameoronlymoderatelyhigher

underTrump,peoplearen’twrongtothinktheeconomy

is better.Morearesharingingrowthnowbecausethe

long expansionhasbroughtworkersoffthesidelines.<BW>

�Foxis a businesscolumnistforBloombergOpinion

◼ LAST THING

●BUTWAIT,IT

GETSBETTER

OfAmericansage

25-54,80%hadjobs

in August,according

totheBureauof

LaborStatistics,the

highestprime-age

employmentrate in

morethana decade

andperhapsa

bettermeasureof

economichealth

thaneitherGDPor

GDIgrowth.

With Bloomberg Opinion

● SMOOTH

CALCULATOR

Accordingto

BEAdata,GDIhas

grownata

2.3%

annualizedpace

sinceTrumptook

office,vs.2.4%during

Obama’stwoterms.

●TIMINGISEVERYTHING

If youmeasurefromthequarterbeforetheytook

office,Trumpleadsin GDIgrowth,2.5%to2.1%.

Measurefromthelastquarterofthefirstyear in

office(becauseit takestimeforpoliciestohave

aneffect),andit’sTrump2.5%toObama2.4%.

●ONTHEJOB

Payrollemployment

hasgrownata 1.5%

annualpaceduring

Trump’stimein

office,fasterthanthe

1%duringObama’s

entirepresidency

butslowerthanthe

1.9%ofObama’s

secondterm.

By Justin Fox

GDI and GDP Paint Different

Pictures of Growth

Realannualizedgrowthratesince

firstquarterofadministration

Obama Trump

Gross domestic product

Gross domestic income

Average

2.1%

2.4

2.3

2.3

2.5

2.7